About JMFA

Southern Independent Bank

Compliant Overdraft Solution Provides Benefits for Community Bank and its Customers that Exceed Expectations

Established in March 2005, by a group of local business leaders and veteran bankers who shared the vision for a true community bank, Southern Independent Bank opened its doors in December 2006. Today, the $210M asset institution has two facilities to serve the rural communities of Opp and Andalusia, Alabama.

Commitment to providing better service leads to overdraft program implementation

After operating an ad hoc overdraft program for several years, bank management began looking for a product that would increase the services provided to customers and area residents. Following the recommendation of state banking association contacts, Southern Independent Bank contracted with JMFA to implement its fully-disclosed JMFA OVERDRAFT PRIVILEGE®.

According to bank CFO John Adams, “We wanted to provide our customers with a product that, if used properly, could help them avoid bouncing checks and save them from paying additional fees.” Soon after the program was implemented, customers as well as the bank began to see benefits. “From a customer service standpoint, the program has been great," Adams said.

Program results positively impact customers and bank performance

“We have heard from customers that they appreciate the program, but perhaps a better indication is that we are seeing a lot of customers using it,” he continued. Adams explained that many of the program’s users are the same customers who were experiencing overdrafts before the bank’s overdraft program was implemented. At that time they were paying additional merchant fees when their insufficient checks were returned. “JMFA OVERDRAFT PRIVILEGE® has reduced those additional fees and helped these customers financially by cutting those costs,” he said.

For the bank, JMFA OVERDRAFT PRIVILEGE® has meant an increase in non-interest income. “When JMFA presented the program, they projected that our overdraft income would double,” Adams remarked. “So far, it has more than doubled.” And even though the bank lowered its overdraft fee, its performance has improved beyond initial revenue projections. The bank has also recovered lost revenue by reducing its Regulation E fee waivers by more than 90 percent.

Vendor support leads to smooth implementation process

Prior to implementing JMFA OVERDRAFT PRIVILEGE®, the bank hired a full-time person to manage the program. According to Adams, this has been extremely helpful from day one.

“Having a full-time staff person who is totally committed to overseeing the program, tracking results, providing on-going employee training and keeping up-to-date on any customer issues has been very beneficial,” he said. “Plus, the relationship between our staff person and JMFA’s relationship manager has been great, which has resulted in a very smooth implementation.”

Now that the program is up and running, Adams sees the customer communications aspect of JMFA OVERDRAFT PRIVILEGE® as a real benefit to successful implementation. “The customer letters are a very effective way to communicate with program users and provide them with the information they need to use the program properly,” he said.

Full disclosure plays a key role in program compliance

As with any financial institution, regulatory compliance is very important to Southern Independent Bank. So when it came time for the FDIC’s compliance exam, management was interested to know how examiners would view the bank’s overdraft program. According to Adams and Jack Whigham, the bank’s full-time overdraft program manager, examiners at the bank’s last examination were extremely pleased with the efforts the bank was making on contacting customers, disclosures that were provided to the customers, and tracking and counseling heavy users of the program. “The communication and counseling approach for heavy users provided by JMFA, as well as core-generated statement notifications were looked at very favorably by the examiners,” said Whigham.

As regulatory agencies continue to review data on overdraft program usage, Adams is confident that whatever adjustments they might make, JMFA will provide Southern Independent Bank with the support it needs to remain compliant. “When they sold us the program they gave us a guarantee that they would address any compliance issues,” he said. “That guarantee was important in our choosing JMFA and I am confident they will stand behind what they promised.”

Recommendation from a satisfied customer

While the program has been in operation just a few months, Adams is very satisfied with the results, as well as the experience of working with JMFA. So much so that he says he would absolutely recommend JMFA to another financial institution looking for an overdraft provider. “They have been very supportive and encouraging, and have responded quickly whenever we have had questions,” he said. “If everyone would provide the service JMFA provides it would make our lives a lot easier.”

About JMFA

JMFA is a leading provider of profitability and performance-improvement consulting. For more than 35 years, JMFA has been recognized as one of the most trusted names in the industry, helping financial institutions reach their goals. JMFA is recognized for earnings enhancement and expense control programs, executive placement, as well as product, service, pricing and technology-improvement consulting. Simply stated, JMFA’s programs and services are designed to increase income or reduce expenses. JMFA is proud to be a preferred provider for performance-enhancement consulting services among many industry groups.